They were defeated in Sacramento each of the past two years. But supporters of a hotly debated plan to expand California’s power grid to other western states aren’t giving up.
Under a new proposal being drafted by Chris Holden, who chairs the state Assembly’s utilities and energy committee, California would organize a regional grid that could eventually cover the entire western United States. Supporters say a regional grid would make it easier for California to meet its climate change goals by tapping into cheap renewable energy sources from other states, like Wyoming wind power or Washington hydropower. California would also be able to sell excess solar power to other states.
The regional grid concept is a priority for Gov. Jerry Brown, who pushed the Legislature to adopt it in 2016 and again in 2017. But opposition from labor unions, community-run electric companies and some environmentalists has stymied the governor. Opponents worry a regional grid would send high-paying solar and wind jobs out of state, raise the cost of electricity for homes and businesses, and cede control of the energy Californians consume to lawmakers in other states, including coal-friendly Utah and Wyoming.
There’s nothing in Holden’s new proposal to mollify the powerful labor unions, at least so far. But Holden’s amended language, which has been circulating in Sacramento for a few weeks, attempts to address concerns related to climate change and state control.
For one thing, California utilities would only be allowed to join a regional power grid if it had a tracking system for carbon emissions, which are the main cause of climate change. Such a system would help California add an extra charge to carbon-heavy energy that crosses over the state’s borders, essentially blocking out-of-state lawmakers from foisting dirty electricity on California and undermining its climate policies.
Regional grid advocates also say they’ve moved on from Brown’s original proposal, which was to merge California’s power grid operator with PacifiCorp, a Warren Buffett-owned utility with customers in six states. PacifiCorp operates six coal-fired power plants in Utah and Wyoming, and critics worried California would be forced to buy electricity from those plants, extending their lifetimes and leading to a rise in climate pollution.
Supporters of Brown’s plan say they’re now focused on partnerships with utility companies in Oregon and Washington, where state officials share California’s focus on fighting climate change, as well as Nevada, which is close to getting out of coal.
“We can really create a renewable engine on the West Coast,” said Lauren Navarro, an attorney at the nonprofit Environmental Defense Fund.
The problem a regional grid is supposed to help solve is that two of the biggest sources of climate-friendly energy are intermittent: The sun goes down every evening, and the wind doesn’t always blow. But the larger the geographic area covered by a power grid, the more clean energy sources there are that can meet electricity demand at different times of day, at least in theory. A study commissioned by California officials found that a unified power grid covering most of the West could lead to $1.5 billion in savings for Californians by 2030, and a 3 to 4 percent decrease in regional climate pollution.
Partnering with Washington in particular, advocates say, would allow California to tap the state’s abundance of low-carbon hydropower dams, which have lots of unused capacity.
Hydropower distributed by the Bonneville Power Administration, a federal agency in the Pacific Northwest, would be the “holy grail” of a regional grid, said Don Furman, director of Fix the Grid, an advocacy group backed by environmentalists and energy companies.
“Bonneville is losing revenues because of the penetration of wind. They are hungry to participate in the California market,” said V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies, a Sacramento-based trade group.
But critics are still skeptical.
The Utility Reform Network, a San Francisco-based ratepayer advocacy group, has long argued that the risks of a regional grid outweigh the potential benefits. That’s still the watchdog group’s position. America’s biggest environmental group, the Sierra Club, still opposes the plan, although it’s been encouraged by some recent changes. Then there are labor unions, which regional grid advocates concede will need some sort of incentive to support a plan that could see fewer solar and wind farms built within California.
Matthew Freedman, an attorney at the Utility Reform Network, said nothing in the bill text being circulated by Holden would stop Buffett’s coal-heavy PacifiCorp utility from trying to join a regional power grid. If California lawmakers vote to expand the state grid operator, known as CAISO, what happens next is out of their hands, Freedman said.
“There’s no gate-keeping function that would exist to prevent disfavored utilities or states from partnering up,” Freedman said. “They can’t discriminate on the basis of, ‘We don’t like you.'”
Holden’s new proposals for tracking carbon and penalizing dirty electricity that’s exported to California are designed to ward off coal-heavy utilities like PacifiCorp, and to attract cleaner utilities in Nevada and the Pacific Northwest. Nevada’s main electric utility, NV Energy, is, like PacifiCorp, owned by Buffett’s Berkshire Hathaway Energy.
While Freedman likes Holden’s new carbon proposals in theory, he’s worried they won’t work in practice. It’s possible, he said, that out-of-state utilities will simply take renewable energy facilities that were built to serve their states and export that electricity to California instead, while continues to use coal- and gas-fired power plants back home. That could mean more renewable energy for California, but no reduction in planet-warming emissions across the West as a whole.
Freedman also worries the Trump administration will interfere, objecting to California’s framework for a regional grid and ordering the state not to discriminate against coal-fired electricity from outside its borders. Regional grid advocates say that kind of interference is unlikely to hold up in court, and that the Federal Energy Regulatory Commission could object to California’s climate policies on similar grounds right now if it wanted to. But Freedman said a regional power grid would invite the Trump administration’s scrutiny.
“We don’t see a compelling value proposition for regional expansion,” he said. “There might be some benefits, but we don’t think it’s a slam dunk.”
The regional grid debate taps into a larger question over the easiest and cheapest way to replace fossil fuels with renewable energy. California already gets nearly half of its electricity from climate-friendly sources including solar, wind, hydro and nuclear. But getting from 50 percent to 100 percent, as State Senate leader Kevin de León proposed last year, could be a lot harder, primarily because solar and wind are intermittent.
Academic studies have found that larger power grids would help solve the problem, with long transmission lines ferrying clean electricity from places where it abounds, like windy Wyoming, to places where it’s needed, like California. While some renewable energy advocates have bought into that idea, others believe that focusing on local resources like rooftop solar, small-scale batteries and smart energy management systems would be cheaper and more sustainable. Neither vision is exclusive, and some experts have argued that the scale of the climate problem demands an all-of-the-above approach.
It’s not clear how much of a personal role Brown will play in power grid discussions this year, after his failed last-minute effort to push a grand bargain on energy issues through the Legislature at the end of the 2017 session. A Brown spokesperson said a regional grid “remains a priority” for the governor. But Holden, a Pasadena Democrat, has taken the lead in recent months, circulating drafts of an amended bill and soliciting feedback.
Whatever happens with the proposal, supporters and opponents say the process has been better this year, with Holden’s office incorporating suggestions from all sides.
“At this point, the proposed language hasn’t met our requirements,” said Kathryn Phillips, director of the Sierra Club’s California chapter. “But I have to say I appreciate the fact that they’re trying to figure out ways to address concerns, and that it’s a more or less open process, compared to what it’s been in the last two iterations.”
Barry Moline, executive director of the California Municipal Utilities Association, said serious questions remain about whether building new power lines across the West would ultimately raise or lower energy costs for consumers. He thinks more rigorous analysis is needed. But he said he was “pleasantly surprised” by Holden’s most recent proposal, and he thinks it will keep improving based on feedback from groups like his.
“In the past, the process has been more smoke-filled room, a lot of stuff going on behind the scene,” Moline said. Not so this time. He called Holden an “honest broker.”
Whether or not California starts a regional power grid, increasing amounts of clean energy will flow across state lines in the West. The main California grid operator, CAISO, launched a more limited interstate program in 2014 known as the energy imbalance market, which now includes five utilities with customers in eight states. Six more grid operators have signed up to join, including one from British Columbia. Mexico’s grid operator has explored whether its Baja California Norte region should join, too.
Meanwhile, renewable energy developers are working on intestate projects that wouldn’t depend on a unified western grid. Those projects include conservative billionaire Philip Anschutz’s plan to spend $5 billion building America’s largest wind farm in Wyoming, plus another $3 billion building a 730-mile power line to carry the electricity to California.